Arbitration is another form dispute resolution and a way to resolve disputes outside of court system. The dispute is heard by an impartial tribunal consisting of one or more arbitrators who will hand down a decision (award). The disputing parties agree to be bound by the tribunal’s decision, and as such, the decision of the tribunal is final and binding.
Arbitration is often used in cases of commercial disputes, particularly international commercial transactions. The advantages of arbitration include the following:
- Parties have the freedom to choose their own arbitrators.
- Parties are able to choose the arbitration rules and procedures which they wish to apply to the arbitration process.
- Arbitration hearings are confidential and heard in private. The decisions of the tribunal are not published like a court decision.
- Parties have the flexibility and convenience of choosing the time and location of the arbitration hearings.
- Disputes are often resolved faster and cheaper through arbitration than through the court processes.
- It is often easier to enforce an arbitration award in a foreign country than a court order/judgment.
- Decisions of the arbitration tribunal are final and binding.